Question

A computer training institute has 625 students that are paying a course fee of $400. Their research shows that for every $20 reduction in the fee, they will attract another 50 students. What fee should the school charge to maximize their revenue?

Answer 1

Given:

Number of students in the computer training institute = 625 students
Course fee per student = $400
Rate = 50 addt'l students per $20 reduction

Total sales = (625+50x) * ($400-20x)

if reduced by $20, sales = 256500
                       $40, sales = 261000
                       $60, sales = 263500
                       $80, sales = 264000
                       $100, sales = 262500

The maximum reduction to maximize sales is $80 or $320 per student and 825 students. 

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